Concerns about how proposed utility rate increases would impact small businesses and/or residents with low- or fixed-incomes halted the Lompoc City Council’s vote on making the needed changes.
“For me, personally, I know we have to do this, but I’m just having some struggle. I wish there was more nuance. I know it’s just a few dollars here and there, but I’m playing it fast forward to five years out,” 4th District Councilmember Jeremy Ball said. “There are people living paycheck to paycheck, and there are businesses struggling every day. I don’t think we’ve talked enough about the impacts and subtle differences on some of those things.”
Second District Councilmember Victor Vega wanted to see the City Council delay its discussion to allow for more members of the public to provide input.
“I wish more people were here from the public or would call in because it affects them,” Vega said. “Without the public’s input to find out what the hardships are out there, it would be a little bit premature.”
In April 2023, the Lompoc City Council approved an emergency 30 percent utility fee increase because city staff identified that the incoming revenue did not meet the increased power supply costs. The last time the City Council approved a rate increase was 2011—more than a decade ago, Management Services Director Christie Donnelly told the City Council during its Sept. 17 meeting.
“In that time between 2010 and 2023, there had been a 38 percent [Consumer Price Index] increase, so inflation had grown 38 percent in that amount of time,” Donnelly said.
To ensure that extreme rate spikes don’t happen again, city consultant Utility Financial Solutions proposed that residents see increases—stretching from 3.5 percent to 2.1 percent over five years—in their monthly rate fees and add a fixed monthly customer facility charge to their bill.
The fixed monthly charge would be $11 in 2025, $16 in 2026, $21 in 2027, $26 in 2028, and $31 in 2029, according to the staff report
The increases could up customers’ average electricity costs from about $70 per month to about $100 per month in each year.
“The energy rate is pretty steady, just a slight adjustment because most of the increase is run through that fixed monthly customer charge,” said Mark Beauchamp, president of Utility Financial Solutions.
Adding a fixed facility charge helps ensure that residents face less of a burden from nonusers, including about 500 identified customers with zero usage, he said.
“I talked about where I live, Michigan—during the winter, 20 percent of our population leaves and goes to Florida or Southern California. If we don’t pay that fixed charge, then all the other ratepayers who endure the Michigan winters have to subsidize me. You have 500 homes that don’t use anything,” Beauchamp said. “So by not having that fixed charge, you are giving them a benefit. They can certainly afford it.”
But Ball’s concerns lie with low-income families who might not be able to afford the fee jumps.
“I’m here to tell you the good and the bad. When it comes to social-type policies, that’s where I need to tell you the positives and negatives, I can’t tell you that you need to do this because of social policies,” Beauchamp responded. “That’s a choice you need to make.”
First District Councilmember Gilda Aiello pushed against Ball’s and Vega’s hesitancy and was frustrated with the lack of alternative ideas.
“I completely understand everyone’s reservation, I guess that’s why when I get my packet, I do my best to fully understand the decision that I am tasked with making for my community even if they don’t show up,” Aiello said. “It isn’t an easy decision to make, but it is our job to do it, work through it, and figure it out.”
The City Council ultimately directed staff to come back with a $10 customer facilities charge, with $5 increases per year as an alternative to see how that would change projected revenues.